Bluefield Daily Telegraph, Bluefield, WV

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April 1, 2011

APCO rate hike OK’d

PSC approves 4.6 percent increase for W.Va. customers

KATE COIL Bluefield Daily Telegraph

BLUEFIELD — Electric rates are increasing again for residents of southern West Virginia.

The Public Service Commission approved a 4.6 percent rate increase for Appalachian Power Thursday. The new rates take effect immediately for West Virginia customers.

The increase will generate an additional $15.2 million in revenue for the company. APCO requested a 13.8 percent rate increase in May 2010, but regulators instead recommended a 5.6 percent increase in December 2010.

Blaine Braithwaite, executive director of the South Bluefield Neighborhood Association, said his association was one group that fought for the decrease in the originally proposed 13.8 percent rate increase.

“Being an intervening party in that proceeding, I know it was a very complex case and demonstrated that we have to be involved in the process to get a fair deal,” Braithwaite said. “A 4.6 percent increase is a big difference from 13.8 percent.”

According to Braithwaite, other utilities as well as the area’s ability to attract new business and residents will be negatively affected by electric rate increases.

“Our big concern now is the ripple effect this increase will now have on other utilities,” Braithwaite said. “Water, sewer, gas and other utilities use electricity for their pumps. This has a direct negative effect on business retention, business recruitment and residency.”

Braithwaite said changes must be made to how the PSC operates to be fair to residents paying for rate increases.

“More than 50 percent of our community is on some sort of fixed income, such as retirement or assistance, and fixed incomes have not kept the pace with these rate increases,” he said. “The PSC doesn’t consider the needs of the community. They only consider only fairness to the utility and profitability. The legislature has to change the process for which these commissioners are selected.”

Braithwaite said the SBNA is also looking into fighting the additional 8.6 percent increase APCO has proposed, which aims to recoup losses as a result of rising coal costs as well as various surcharges. Braithwaite said he anticipates another rate increase to be approved this year. APCO has also petitioned the PSC for a separate 8.6 percent rate hike to recover costs for buying coal and electricity as well as upgrading equipment to meet environmental standards.

According to a release issued by the PSC, the commission approved the 4.6 percent increase, allowing for a lower rate of return, limiting the recovery of storm damages and excluding all executive bonuses or supplemental compensation for APCO executives.

Craig Hammond, director of the Bluefield Union Mission, said he is already seeing more requests for utility assistance than ever.

“We are seeing record numbers of people requesting assistance, and it hasn’t let up at all,” Hammond said. “This new increase could make things worse, though it is good that it wasn’t as high as we thought. We are averaging 35 applications for assistance a day for electricity alone. We have other requests for aid with other utilities, too.”

Hammond said increased costs are forcing families to make tough choices.

“We have hundreds of families seeing an increase in the price of food, utilities and fuel,” Hammond said. “Wages have declined because hours have been cut back. Wages are still stagnant or loosing. For the first time in many years, I am meeting families who are unable to grasp what is going on and don’t know how to find their way out. Decisions are hard and less money is chasing more expenses.”

Still, Hammond said he is hopeful conditions will improve along with the economy.

“I’m an optimist and I think we will recover,” he said. “We’re in for a rough six to eight months, but there should be a recovery.”

Bluefield Mayor Linda Whalen said rate hikes affect all segments of the community.

“I think every utility seems to be asking for rate increases,” Whalen said. “This not only affects citizens, but it affects every business and the city. The city and local businesses have to pay utility costs just like everyone else. Businesses often have to pass that increased cost down onto citizens, who end up paying for these rate increases many times over.”

Whalen said the city has contacted state officials and legislators, but that citizen involvement is needed to prevent further utility rate hikes.

“Until citizens can get involved, there isn’t much else the city can do that we haven’t done already,” Whalen said. “The city contacts all government officials and writes letters to them asking to look into these increases. Citizens need to contact their delegates and state senators about how PSC members are chosen. They need to contact their senators and congressmen and ask them to reign in the EPA regulations that are driving up our utility costs. We are going to have to stand up for ourselves.”

— Contact Kate Coil at

kcoil@bdtonline.com

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